What’s making currency accounts so difficult?

Such transactions should be straightforward. But additional factors around currency accounts mean this isn’t always the case.

First there’s due diligence, not just in terms of exchange rates but additional benefits such as the interest rate on the account.

Accounts are generally not marketed very well, which makes this process harder than necessary. Finance directors don’t know who offers good currency accounts, and it can be difficult and time-consuming to pick through the relative benefits and constraints.

Then the accounts can be difficult to set up. Banks can be judgmental about your status, resulting in unnecessary jumping through hoops.

After all that, the services around the account often require as much management as initiating the account.

The fact is, customers tell us, that currency accounts create as many headaches as they solve. But are they really necessary? Can all of this be avoided?

The alternative model using escrow accounts and a transactional currency exchange mechanism keeps control and security where it should be. This is what freemarket provides.

By its nature, the escrow account therefore becomes part of the transaction requiring little management once it is set up. Overall the trade-off becomes about efficiency and control. For organisations that spend much of their time dealing in a specific currency, a traditional account may make more sense.

For companies that see currency in general, or certain currencies in particular as a means to an end, efficiency becomes more of a priority.

In either case alternatives now exist, which means that finance directors can spend their valuable time dealing with the more important aspects of running the business.

James is freemarket’s Chief Commercial Officer. He has a history of finding new ways to solve age-old financial challenges and was responsible for launching some of the first online money transfer and prepaid card initiatives in Europe.